Among others, Stone India fell by 7.71 percent and Kernex Microsystems India was down 4.95 percent. In its budget preview, broking firm Motilal Oswal Securities Ltd said, "Rail Budget is likely to launch a plethora of initiatives along with an improvement in its finances."

"We expect railways to report an improvement in finances, bolstered by freight revenue, announce new innovative sources of funding and make some headway in taking the PPP schemes forward, besides announcement toward improvement in infrastructure, operations and passenger amenities," it said.

Share prices of companies in the rail sector have rallied quite sharply in recent weeks. "Budget allocation to improve the rail infrastructure will be positive for companies dependent on railway orders," said Daljeet S Kohli, Head of Research, IndiaNivesh Research.